• Generated $193 million in constant currency in the third quarter; strategic initiatives and SKU rationalization impacted revenue by $13 million
• Tilray Beverage expands U.S. distribution of hemp-derived THC drinks across 10 states, increases Project 420 cost savings plan to $33 million
• Tilray Cannabis increased gross margins by 800 basis points (bps), remains the leader in Canada by sales performance, and generates strong sales growth in Germany
• Strengthens balance sheet with convertible note reduction of $58 million and total debt reduction of $71 million, $248 million available in cash and marketable securities

[PRESS RELEASE] – NEW YORK and LEAMINGTON, Ontario, April 8, 2025 – Tilray Brands Inc., a global lifestyle and consumer packaged goods company at the forefront of beverage, cannabis and wellness industries, reported financial results for its third quarter that ended Feb. 28, 2025. All financial information in this press release is reported in U.S. dollars unless otherwise indicated.

In response to the recently announced tariffs on international trade, Tilray analyzed the potential implications on its business. The analysis concluded that these tariffs should not impact sales. In the United States, Tilray’s American beverage brands are solely manufactured and distributed within the U.S. market. In Canada, Tilray’s cannabis brands are produced domestically for Canadian consumers. In Europe, Tilray manufactures medical cannabis brands and products for distribution across Europe and Australia. Regarding Tilray’s wellness business, Manitoba Harvest is currently exempt from the new tariffs.

“Tilray Brands is shaping the future of consumer markets with a robust global infrastructure spanning the beverage, cannabis and wellness industries,” Tilray Brands Chairman and CEO Irwin D. Simon said. “We are meeting the needs of today’s consumers while preparing for the demands of tomorrow. In the third quarter, we prioritized sales quality and revenue, protected margins, reduced debt, and improved our capital structure. With a strong balance sheet and a clear vision for the future, Tilray is well-positioned to capitalize on emerging opportunities and ensure long-term success.

“We see opportunities in the alcohol, cannabis and wellness industries and believe these sectors are here to stay. Tilray is relentlessly focused on building strong brands and developing innovative products to seize growth opportunities across all our businesses. At Tilray, we are laser-focused on building a sustainable global business platform by emphasizing profitable sales growth, improving profit margins and cash flow generation, and maintaining a solid balance sheet to navigate market challenges and capitalize on strategic opportunities. In Q3, we delivered our highest cannabis gross margins in almost two years, and as of today, our net debt is now less than 1x EBITDA on a trailing 12-month basis. We will not seek sales growth merely for the sake of sales if it does not add to the bottom line and benefit our shareholders.”

Strategic Growth Initiatives – Third Quarter Fiscal Year 2025

Tilray Beverage Project 420: Tilray Beverage completed $20.6 million of an expanded Project 420 cost-savings plan of $33 million. Project 420 aims to reduce costs to improve efficiency and profitability by rationalizing SKUs, geographies and distribution and is expected to be completed in the third quarter of fiscal 2026.

Hemp-Derived THC Drinks in the U.S: Tilray Brands is strategically positioned to utilize the expertise of its hemp wellness and cannabis businesses to responsibly formulate beverages infused with 5 milligrams and 10 milligrams of hemp-derived THC. During the fiscal year to date, Tilray generated $1.4 million in revenue from hemp-derived THC beverage sales and expanded the distribution of these drinks across more than 1,000 points of distribution in 10 states including Florida, Alabama, Georgia, North Carolina, South Carolina, Tennessee, Louisiana, and New Jersey, as well as through online direct-to-consumer channels.

In addition to our existing mocktail and seltzer brands Happy Flower, Fizzy Jane, and Herb & Bloom, the company is pleased to introduce 420 Fizz, a low-calorie soda beverage infused with hemp-derived THC. Tilray also leverages its established national beverage distribution network, which spans independent retailers, convenience stores and package stores, including multistate retailers such as Total Wine and ABC, which have expressed strong interest in this category and new growth opportunity.

Tilray Cannabis Profitability Initiatives: Tilray’s Cannabis segment is focused on profitability and margin protection. In the third fiscal quarter, Tilray Canada redirected inventories to international cannabis markets to capitalize on higher margins expected in these markets in the upcoming fourth fiscal quarter. Tilray’s global cannabis supply chain is in Phase II of its accelerated growth plan, and the cultivation footprint is expanding to meet increasing demand in both Canadian and international markets. The Cannabis segment is concentrating on preserving gross margins and maintaining higher average selling prices in categories such as vapes and infused pre-rolls, which have experienced significant price compression and are margin dilutive. Growth in these categories is expected to resume later in the upcoming fourth fiscal quarter due to capital expenditures improving our operational efficiencies.

Debt Reduction; $248 Million Cash and Marketable Securities: As of April 8, 2025, Tilray reduced its outstanding total debt by $71 million with a convertible note reduction of $58 million, strengthening the balance sheet. As a result, net debt to trailing 12 months EBITDA is less than 1x. The company’s $248 million cash balance, including marketable securities, provides Tilray with great flexibility for strategic opportunities.

AI and Cryptocurrency Business Strategy: Tilray Brands is dedicated to leveraging advanced technologies to align with our shareholder interests, the consumer of tomorrow, enhancing efficiency and driving growth. The company is implementing AI across its global operations to enhance its expertise, optimize processes, achieve substantial improvements and advance its business objectives. In the cultivation sector, Tilray is utilizing advanced horticulture automation technology throughout its global greenhouse operations. By integrating this technology with AI-driven data insights, the company can manage greenhouse conditions in real time, leading to more efficient operations, increased output, superior quality and reduced costs for resources such as labor, water and energy. Additionally, Tilray plans to accept cryptocurrency as a payment method within the company’s online operations. The company is also exploring strategic initiatives related to cryptocurrency that align with our business goals.

Financial Highlights – Third Quarter Fiscal Year 2025

• Net revenue of $185.8 million in the third quarter compared to $188.3 million in the prior year quarter. On a constant currency basis, net revenue in the current third quarter increased to approximately $193 million. The prior year quarter included revenue of $6 million of now-discontinued SKUs. Strategic initiatives and SKU rationalization impacted revenue by $13.2 million in the current year quarter.
• Gross profit increased by 5% to $52 million in the third quarter compared to $49.4 million in the prior year’s quarter. Gross margin increased 200 bps to 28% in the third quarter compared to 26% in the prior year’s quarter.
• Net loss was $(793.5) million in the third quarter, due to approximately $700 million of noncash impairment as a result of macroeconomic conditions and declines in market capitalization, foreign exchange loss, amortization, changes in fair value of convertible notes receivable and stock-based compensation as well as nonrecurring transaction and restructuring charges.
• Adjusted net loss was $(2.9) million in the third quarter compared to an adjusted net income of $0.9 million in the prior year quarter.
• Adjusted EPS remained at $0 in both the third quarter and the comparative period.
• Adjusted EBITDA in the third quarter was $9 million compared to $10.2 million in the prior year quarter due to the beverage segment’s SKU rationalization impact of $1 million and $0.6 million related to the prioritization of international cannabis markets.
• Beverage alcohol net revenue increased to $55.9 million in the third quarter, up from $54.7 million in the prior year’s quarter, despite a $6 million impact from the strategic SKU rationalization.
  • The beverage alcohol gross margin increased to 36% in the third quarter compared to 34% in the prior year’s quarter.
• Cannabis net revenue was $54.3 million in the third quarter compared to $63.4 million in the prior year’s quarter. On a constant currency basis, cannabis net revenue was $57.5 million. The strategic initiative to redirect product from Canada to international markets resulted in a timing impact on revenue of $3.2 million. Additionally, a strategic decision to pause the company’s presence in margin dilutive categories, such as vapes and infused pre-rolls, led to a revenue decrease of $4 million but prevented a potential loss exceeding $3 million.
  • Cannabis gross margin increased to 41% in the third quarter compared to 33% in the prior year quarter, resulting from the company’s strategic prioritization of the international business and the reduction in its exposure to margin dilutive categories.
• Distribution net revenue increased 8% to $61.5 million in the third quarter compared to $56.8 million in the prior year’s quarter. On a constant currency basis, distribution net revenue was up 15% to $65.1 million.
  • The distribution gross margin was 9% in the third quarter compared to 10% in the prior year’s quarter.
• Wellness net revenue increased 5% to $14.1 million and 8% on a constant currency basis to $14.5 million in the third quarter compared to $13.4 million in the prior year’s quarter.
  • The wellness gross margin increased to 32% in the third quarter compared to 30% in the prior year’s quarter.

Company’s Fiscal Year 2025 Guidance

The Company revises fiscal year 2025 guidance for net revenue to $850 million to $900 million. Adjustments for constant currency and the impacts of the strategic initiatives and SKU rationalization, which total approximately $50 million, would have resulted in an expected net revenue of $900 million to $950 million.